Bush,s tax cut?

Paul Krugman, in a May 27 article in the New York Times titled "Stating the Obvious", wrote that "the gimmicks used to make an $800-billion-plus tax cut carry an official price tag of only $320 billion are a joke, yet the cost without the gimmicks is so large that the nation can't possibly afford it while keeping its other promises; ... The people now running America aren't conservatives: they're radicals who want to do away with the social and economic system we have, and the fiscal crisis they are concocting may give them the excuse they need."

Two days later, Peronet Despeignes, reporting in the Financial Times of London, wrote that "The Bush administration has shelved a report commissioned by the Treasury that shows the US currently faces a future of chronic federal budget deficits totaling at least $44,200 trillion [the deficit is currently at about six trillion dollars] in current US dollars."

That's trillion with a "T". To put that terrifying figure in perspective, Despeignes reported it to be the rough equivalent of four years of US economic output or 94% of all US household assets, and that "closing the gap would require the equivalent of an immediate and permanent 66 per cent across-the-board income tax increase."

The next day, on his Public Television show "Now", Bill Moyers was blunt. The Bush Administration, he said, kept news of this impending debt from the public "lest it throw the fear of God into Congress and the financial markets and cost them the tax cut for the rich." Moyers went on to say that "we are watching the country's future slip deeper and deeper into a black hole of red ink."

And two days after that, Noam Chomsky, in an interview on C-Span televised on June 1, stated flatly that the tax cut was calculated to lead to a "fiscal train wreck".

"At some point", Krugman wrote, "Bond markets will balk - they won't lend money to a government, even that of the United States, if that government's debt is growing faster than its revenues, and there is no plausible story about how the budget will eventually come under control."

But that's the very point of massive tax cuts: breaking the bank so as to kill social programs. It was a point made very well by Press Secretary Ari Fleisher when pressed on the issue. Congress, Fleisher said, would have to reform programs accordingly. He didn't say "kill", which would have been more appropriate.

Corporate America has spent billions lobbying for deregulation of its activities and for privatization of everything from the health system to education to national parks and forests to Social Security -- a situation that would lead to ownership and control by the corporate sector and a tiny handful of the super rich of virtually every aspect of society.

With no cash in the federal till -- due to massive tax cuts along with huge deficits, and ultimate inability of the government to borrow further -- there would no longer be much to argue about. The corporate sector would win by default, so that everything needed by the masses would have to be obtained through them at any price they would want to charge.

As the deficit balloons, the rightist program to privatize public lands is also moving right along. Free marketeer Terry Anderson, whose published plan to give each citizen "shares" of the public domain, said shares being sellable on the open market to those with the wealth to scoop them up, has been made President Bush's adviser on public lands issues.

Late last year, fellow free marketeer and Interior Secretary, Gale Norton, a product of the anti-environmental "Wise Use Movement", revealed plans to "outsource" to the private sector 3,500 jobs in the U.S. Park Service. This raised no eyebrows, and by January, 2003 the estimate had risen to more than 11,000 positions - an eyebrow-raising 72%. Soon thereafter President Bush revealed that as many as 850,000 positions, now federal, could become privatized. It was a declaration of war on public ownership and government by the people, framed as an argument for fiscal efficiency.

With country and culture in the hands of a very few, democracy perishes.

7 Answers

Boy the nay Sayer's came out in force on this one.. how silly you were to quote that Liberal Ideologue.. If I don't like Wall mart I'll shop at target ???? it's amazing how some people just miss the point all together and then others more focused.. dispel and boo.. but then point to their own ideology. Sorry boys but Tax cuts for the ultra rich isn't working.

1% controls 35% of the wealth in this country.. the bottom 50% controls about 3%.

Less than 1% of stocks and other market share items are traded by that same 50% on the bottom.. 40% of houses sold in 2004 were second homes.. where are the tax cuts "working" ? .. the thing is when you offer facts they offer lip service about liberal tin hats and all sorts of other distracting babble but the reality sits squarely on the shoulders of the poor in this country and more and more so on the world.. Very Rich and very Poor is the inevitable climax to all of this.. but will our Country still be here when it's done is something that very few people are dealing with seriously.. only time will tell. The sad truth is that there seems to be very little that we can do .. the patriot act 1&2 makes anyone not eating McDonalds and watching Fox an enemy combatant ..

where do we go from here ?

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Anonymous

1 decade ago

Krugman and Chomsky and Moyers are ultra-left idiots. They have put ideology before truth so many times, why would any sane person accept anything they say?

Tax cuts stimulate the economy. This has been proven over and over in history, with economic gains following cuts in high tax rates. No nation has ever taxed (or spent) its way to prosperity - they eventually run out of other peoples' money.

As for a projected deficit of $44,200 trillion - that's rubbish. The governmental outlays are not even $2.5 trillion annually, and the budget deficit is now less than $500 billion. So where did that dumbass number come from, and why would any sentient being find it credible in the least?

And the deficits are shrinking because of increased, yes INCREASED tax revenues (which also happens each time high tax rates are reduced, after the period it takes for the $$ to stimulate the economy).

As for 'killing' social programs - the truth is that Social Security, Welfare, Medicare, Medicaid, etc are all unconstitutional spending by the government. And this unconstitutional spending by the government accounts for one-half to two-thirds of all federal spending. It should be killed!

As for corporations, they do NOT want deregulation. They can make more profit when they do NOT have to compete, because they have been able to buy congressmen (especially Democrat congressmen) into preventing competition for them. Remember how the US airlines were fat and happy prior to deregulation? Because they owned the air routes (thanks to congress) and could charge what they wanted. So this point is complete liberal hogwash!

As for corporations providing everything people need - they already do that. Government never did that - except by virtue of the goods and money they steal from taxpayers to so 'compassionately' give to people who didn't earn it.

As for privatizing government funcitons, that's a good thing. It prevents the public sector unions from controlling our government, and lets it be controlled by the people WE ELECTED.

LOL. "With country and culture in the hands of a very few, democracy perishes". It's funny that you don't see the irony in that statement. Conservatives want the power in the hands of the private sector (where we have freedom and choice) and you want power in the hands of an all powerfull federal government (where we have no freedom and no choices). If Wal-Mart screws me, I can shop at Target, K-Mart, Sears, etc. When the federal government screws me, I can shop at .......

I know you mean well, but do you really want all the power in the hands of the ultimate monopoly (the federal government)? Or would you rather have power in coroporate hands, where you can freely choose between several competitors? There is no democracy without choice. Freedom or slavery, the choice is ours.

As long as it profits big business, Bush is all for it. I've seen reports that 9/11 was responsible for less than 1/3 of the initial deficit, if it weren't for Bush's tax plan, the recession would have passed very quickly.

Bush has always been act first, think later.

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So what is your view? Posting someone else's rant from 3 years ago does little to prove anything.

Our economy is on the upswing, as many analysts cite indicators that it is rising as fast as it was 10 years ago. The difference is that Bush Sr. didn't get the chance to be in office long enough to reap the credit that went to Clinton.

Corporate scandals, high oil prices, natural disasters, and the war in Iraq hasn't been enough to shake our economy for long. It shows how important many of Bush's tax policies have been to help make it more resistant to recessive behavior. This article was written in 2003, and clearly did not predict the outcome of such policies well. The only deficits you are seeing today is mainly a result of the natural disasters and war in Iraq that we continue to recover from.

Paul Krugman is a respectable economist that has let his political views dominate his discussion. He has leaned away from objectivity in favor of a liberal focus. This means that although some of his arguments are valid, he chooses to ignore the problems and misdeeds of those who have the same political affiliation. The lop-sided view cannot possibly help solve a crisis when you refuse to admit all sources of the cause.

"He refers to these critics as his “stalkers”. Many of them spend an inordinate amount of time quibbling about minor semantic points, or trivial differences in statistics. But they cannot all be easily dismissed. The more reasonable ones allow that he is a gifted writer and economist, but also argue that these days his relentless partisanship is getting in the way of his argument. Is the American political and economic picture, they ask, really as one-sided as he paints it? And if not, should an economist of Mr Krugman's prominence be telling the public that it is?

A glance through his past columns reveals a growing tendency to attribute all the world's ills to George Bush. Regarding California's energy crisis, for example, he berated the Bush administration and the Federal Energy Regulatory Commission for not imposing price caps sooner—but found no room to mention Bill Clinton, who presided over a similarly inactive FERC for the first part of the crisis, nor to attack California's then Democratic governor Gray Davis for his disastrous refusal to allow consumer prices to rise. After Mahathir Mohamad, the prime minister of Malaysia, recently gave an anti-Semitic speech, Mr Krugman argued that the Bush administration's ham-fisted foreign policy had forced Dr Mahathir to make the remarks in order to shore up domestic political support—most unlikely, given that he was about to step down.

Even his economics is sometimes stretched. A recent piece accused conservatives of embracing the “lump of labour fallacy”, the mistaken claim that there is a fixed quantity of work which governments must strive to allocate equitably. In fact, the paper he cited did not commit the lump of labour fallacy. He used game theory to argue that, by criticising North Korea but not attacking it, and then going after Iraq instead, Mr Bush is “probably” encouraging North Korea to become a more dangerous nuclear power. This probably did not convince most game theorists. Overall, the effect is to give lay readers the illusion that Mr Krugman's perfectly respectable personal political beliefs can somehow be derived empirically from economic theory."

It's usually referred to as the "Starve the beast" theory - cut taxes so much that the government dies off. Grover Norquist (one of Bush's buddies and a rabid tax-hater if there ever was one) put it this way: "I don't want to starve the government. I want to make it small enough that I can drag it into the bathroom and drown it in the bathtub."